NC S797

Changes the automatic income tax rate reduction trigger from a simple revenue threshold to a three-part requirement: the recommended Savings Reserve Balance must be met, plus both a revenue adequacy trigger and recession indicator trigger must be achieved.

Reduces the annual tax rate decrease from 0.5% to 0.25% when triggers are met, with a floor rate of 2.49%.

Establishes specific General Fund revenue trigger amounts ranging from $33.042 billion (FY 2025-2026) to $39 billion (FY 2032-2033), with corresponding taxable years for rate reductions.

Creates revenue adequacy trigger based on comparing estimated revenue under reduced tax rates versus revenue needed to cover inflation, population growth, and court-ordered costs.

Creates recession indicator trigger based on comparing combined U.S. and North Carolina unemployment rates from June-August against prior fiscal year's lowest quarterly rates; trigger met if current rates are less than 0.5% higher.

Requires annual joint calculation of trigger conditions by the Office of State Budget and Management and Fiscal Research Division, with results reported by October 1 to the Department of Revenue and finance committees.

Effective for taxable years beginning January 1, 2025 or later.